Biden Will Cancel $6.2 Billion of Student Loans Through Changes to Student Loan Forgiveness

By Mentor Staff | Edited By Mentor Staff

Updated On March 11, 2022

Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.

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President Joe Biden will cancel $6.2 billion of student loans for borrowers. That’s good news if you have federal student loan debt and are pursuing student loan forgiveness.

Top Picks For Student Loan Refinancing

May 2022

Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
1.74% - 7.99%
3.49% - 7.99%
1.74% - 7.99%

View Details

on SoFi's website

Overview

Variable APR:
1.74% - 7.99%
Fixed APR:
3.49% - 7.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
1.74% - 7.99%
2.74% - 7.99%
1.74% - 7.99%

View Details

on Earnest's website

Overview

Variable APR:
1.74% - 7.99%
Fixed APR:
2.74% - 7.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except KY or NV
Hardship Deferment:
Yes
Co-signer Option:
No
1.74% - 7.99%
2.74% - 7.99%
1.74% - 7.99%

View Details

on NaviRefi's website

Overview

Variable APR:
1.74% - 7.99%
Fixed APR:
2.74% - 7.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
1.86% - 6.01%
2.73% - 5.99%
1.86% - 6.01%

View Details

on ELFI's website

Overview

Variable APR:
1.86% - 6.01%
Fixed APR:
2.73% - 5.99%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$15,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
1.74% - 8.70%
1.99% - 8.63%
1.74% - 8.70%

View Details

on Splash's website

Overview

Variable APR:
1.74% - 8.70%
Fixed APR:
1.99% - 8.63%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 20 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
Yes
1.99% - 8.38%
3.74% - 8.63%
1.99% - 8.63%

View Details

on Citizens' website

Overview

Variable APR:
1.99% - 8.38%
Fixed APR:
3.74% - 8.63%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
1.89% - 5.90%
2.99% - 6.00%
1.89% - 6.00%

View Details

on Laurel Road's website

Overview

Variable APR:
1.89% - 5.90%
Fixed APR:
2.99% - 6.00%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
1.90% - 5.25%
2.49% - 7.75%
1.90% - 7.75%

View Details

on LendKey's website

Overview

Variable APR:
1.90% - 5.25%
Fixed APR:
2.49% - 7.75%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
4.44% - 8.48%
4.44% - 8.48%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
4.44% - 8.48%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

Student loan cancellation: 100,000 student loan borrowers get $6.2 billion of student loan forgiveness

The U.S. Department of Education made the major announcement, which could initially impact 100,000 student loan borrowers. Over time, the Education Department expects that 550,000 student loan borrowers can get their student loans cancelled. The Biden administration has made several historic changes to the Public Service Loan Forgiveness program. These changes have relaxed the requirements, which has increased how many borrowers can qualify.

(Learn more: How to pay off student loans)

How public service loan forgiveness works

Created in 2007, the Public Service Loan Forgiveness program helps student loan borrowers get student loan cancellation for their federal student loans. There are several qualifications needed to get student loan forgiveness.

  • First, a student loan borrower must work for a qualified public service or non-profit employer.
  • Second, a borrower must enroll in an income-driven repayment plan.
  • Third, a borrower must make at least 120 student loan payments.

After meeting these requirements, and others, the borrower’s remaining federal student loan balance will be cancelled.

There are many jobs that qualify for student loan forgiveness. This includes police officers and firefighters to teachers and members of the military. Student loan borrowers can apply through their student loan servicer or directly with the U.S. Department of Education.

(Read: The Ultimate Guide To Student Loan Forgiveness)

Major changes to student loan forgiveness

In October 2021, the Biden administration announced major changes to student loan forgiveness. These changes will make it easier for more student loan borrowers to get student loan cancellation. To date, the Biden administration has identified the 100,000 student loan borrowers who collectively will get $6.2 billion in student loan cancellation.

The major changes will now “count” previous student loan payments that were previously ruled to be ineligible. These payments can now be “counted” toward the 120 monthly payments. The major changes include:

  • Count student loan payments that were late;
  • Count partial student loan payments;
  • Count student loan payments made under the wrong student loan payment plan;
  • Count student loan payments while members of the military were on active duty; and
  • Count student loan payments that were made prior to student loan consolidation.

(Learn more: How to pay off $50,000 of student loans)

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